Will Health Insurance Coverage Continue If a Job Is Lost?
Millions of Americans obtain their health insurance through their employers, which puts their insurance at risk if they become unemployed. Several federal policies make it possible for former workers to keep their health insurance in effect, or transfer to a new insurer. Even if you have a pre-existing condition, you can keep up your coverage for a year or more.
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Continuation
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The Consolidated Omnibus Budget Reconciliation Act gives most American workers with an employee health plan the right to keep the plan after they leave the job, the U.S. Department of Labor states. If you qualify under COBRA, you can retain your health insurance for 18 months, regardless of whether you quit, were laid off or were fired, unless the firing resulted from gross misconduct. To keep your coverage, you pay your employer's share of the premium, plus a 1 to 2 percent administrative charge.
Time Frame
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If you're entitled to COBRA coverage, the insurer must tell you about your options no more than two weeks after your employer gives notice that you're no longer employed. You have two months after notification--or the day coverage stops, whichever is later--to accept COBRA, according to the Department of Labor, or you lose your chance.
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Warning
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If you lose your job because your employer went out of business, or the company shuts its doors after you enrolled in COBRA, the company health plan may cease to exist. In that case, according to the Department of Labor, you'll no longer be able to obtain COBRA coverage.
Considerations
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If your spouse is covered through her workplace, the Health Insurance Portability and Accountability Act gives you the right to enroll in that plan, provided you'd normally be eligible, after you leave your job. Regardless of the normal window for new enrollments, you can sign up within 30 days of losing your old job, the Department of Labor states. You lose your chance to enroll if you wait longer than 30 days.
History
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Under HIPAA, if you enroll in your spouse's plan or move from COBRA to a health plan at your next job, you can't be refused for pre-existing conditions. If you've received treatment for a particular condition in the six months before you enroll--arthritis or asthma, for example--your new plan may be able impose up to a 12 month delay before that condition receives coverage, according to the Department of Labor.
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